Last year was tough for dairy farmers in China and while prospects remain challenging for 2024, the bright spot in the market is for those involved in organic dairy farming.

The market and growth for organic dairy continues to achieve double-digit growth as health and quality-conscious consumers continue to choose organic dairy products.

This has led to an increase in the conversion to organic farming, with industry estimates suggesting that up to 15% of farms are producing milk that is being marketed as organic.

One of the most impressive dairy farming operations I have visited in China is an organic producer called Shengmu Dairy.

Shengmu is now a publicly traded company and has built a farming business in the deserts of Inner Mongolia.

Shengmu has over 140,000 head of cattle across 20 farms and approximately 30,000 acres under management and has done an incredible job in converting the desert through Israeli irrigation and Chinese determination.

Sustainable development goals

If there was ever an advertisement for the positive impact of dairy farming, it’s this place. The UN sustainable development goals are central to everything Shengmu does.

Without dairy production, this area would have no local economy. Dairy cows have brought the region to life.

Now that China has waived visas for Irish citizens to travel, I hope that more Irish farmers will come and see the farm firsthand. The fresh milk served on farm is as good as anything I have tasted.

The standards that Shengmu meet are guided by China’s organic standards, which were streamlined in 2020.

Guidelines are similar in principle to the US and the EU. Farms must be located over 20km from industrial production, while standards for cropping and feed inputs, animal health and animal welfare are mandated as they would be in Ireland.

It is also great to see Irish technology, specifically rumen buffers, are part of the mix in stringent organic standards helping to improve rumen efficiency, improve butterfat and to mitigate against heat stress.

Clearly, consumers respond well to the topic of organic milk.

Yili’s organic dairy branch Satine is so popular that it is in the Guinness World Records for the highest organic dairy sales.

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Other domestic players are launching their own organic dairy brands, and clearly the biggest barrier for groups to enter is around farm locations, organic fodder and being able to meet the related criteria.

International dairy brands are also in on the action.

While some milk suppliers have made the conversion to organic on a national scale, it is insignificant

Bellamy’s, the Australian offering in the organic space, was the top international organic dairy brand and was subsequently acquired by Chinese dairy giant, Mengniu, in 2019 and continues to grow strongly in the organic formula market in China.

In Ireland, there are some good locally available organic dairy products.

While some milk suppliers have made the conversion to organic on a national scale, it is insignificant.

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Potential

Clearly, Chinese consumers are deciding organic is something they want and there is huge potential at home and abroad to move towards organic.

Can organic farming be accelerated and in parallel help us meet our environmental, social and governance (ESG) requirements? Now there is some (organic) food for thought.

Shengmu Dairy.